MANILA – The Department of Finance remains optimistic that the economy will grow faster in the second half of the year, what with larger investment inflows and exports, higher infrastructure expenditures, and an improved revenue effort that posted a first-semester performance that is the highest ever in the country’s tax history.
Economic numbers for the second semester remain “very promising” and that the year’s second quarter gross domestic product (GDP) growth of 6 percent was a mere “exception that does not indicate a medium-term trend,” Finance secretary Carlos Dominguez III said in a statement Wednesday.
The inflation rate, which reached 5.7 percent in July but actually eased to 0.5 percent on a month-on-month basis, is expected to go down to the original forecast range of 4 to 4.5 percent by the end of the year, based on Development Budget Coordination Committee projections, said Dominguez.
“Domestic demand remains robust. Investment flows grew in the first half of this year. Our exports of goods and services recovered to a double-digit growth of 13 percent in the second quarter from 6.5 percent in the previous quarter,” Dominguez told the weekly news forum “Kapihan sa Manila Bay” at Café Adriatico in Malate district.
In terms of expenditure, the government’s effort improved to 19.47 percent, the highest first-semester expenditure effort since 2003, he noted.
In the first half of the year the government’s revenue effort also improved by 1.47 percentage points to 17.12 percent, the highest first-semester revenue effort ever achieved since 1946, Dominguez said.
Moreover, the tax effort of 15.23 percent is also the country’s highest first-semester tax effort, he said, pointing out that this accomplishment is a result of the Tax Reform for Acceleration and Inclusion Act and tax administration improvements in the Bureau of Internal Revenue and Bureau of Customs.
“Our tax effort is now at par with the best-managed economies in the region,” Dominguez said. “It is a tax effort we can very well sustain, especially with the subsequent packages of the comprehensive tax reform program now being deliberated [by Congress].” (With reports from DOF and PNA/PN)
